Online application for a SBA small business loan. |
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SBA small business loan. Submit an online application to learn about a SBA small business loan. Read our tips on applying for a loan and how to avoid guaranteed business loan scams. Or consider a small business credit card or a cash advance payday loan for fast capital. | |||
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Thousands of small businesses in America have benefited from Federally guaranteed funding.
When applying for a Small Business Administration loan, you will need to submit a proposal. Here's how to proceed:
Begin your proposal with a cover letter or executive summary, and define who you are, your business background, and what your business is about. Include the amount you desire and the purpose for the business loan, as well as how you want to repay the loan and how it will benefit your business.
Description of Business: Provide a written description of your business, including the following:
Type of organization
Date of information
Location
Product or service
Brief history
Proposed Future Operation
Competition
Customers
Suppliers
Management Experience: Resumes of each owner and key manager.
Personal Financial Statements: The Small Business Administration demands financial statements of all principal owners (20% or more) and guarantors, and attach a copy of the previous year's federal income tax return.
Loan Repayment: Provide a short statement as to how/when the loan will be repaid.
Proposed Business: Provide a pro-forma balance sheet showing sources and uses of both equity and borrowed funds.
Projections: Provide a projection of future operations for at least one year or until positive cash flow can be shown, with earnings, expenses, and reasoning for these estimates.
Advance fee, guaranteed business loans:
Be careful when dealing with anyone who offers a guaranteed business loan for bad credit people. Companies making these guarantees ask applicants to pay a processing fee, which means paying for the privilege of getting a loan, and then there's not always a guaranteed loan approval. And even worse, instead of getting a guaranteed business loan as promised, all the recipient receives is a list of places to apply, or is merely referred to a lending source which doesn't require an advance fee. Although there are legitimate resources online that can help you with your small business loan application, keep in mind that only the federal government can promise a federal business loan, or any loan from the government. Non-government agencies and companies can tell you about federal loans, how much money is available, and how to apply, but no one outside of the government can actually guaranty a federal government loan. Here are tips to help you avoid guaranteed business loan scams: Don't believe all promises of a guaranteed loan regardless of bad credit. Don't pay an advance fee or deposit. A legitimate lender will not guarantee a business loan by pre-paying. To report an advance fee guaranteed loan scam, call (800) 876-7060 or use the complaint form on the www.fraud.org Web site. The information will be supplied to the Federal Trade Commission and other law enforcement agencies.
Need more information? Read our financial and credit articles related to business loan, and join our online financial newsletter.
Equity 2ndmortgage
Consumers sometimes wonder if they should refinance the first mortgage or get a second mortgage instead. Refinancing a home to cash out some equity can be expensive, as there can be lender fees, title, escrow, appraisal charges, and other charges. These types of fees can quickly add up to thousands of dollars. If interest rates are lowered or there is a chance to get more favorable terms than the current mortgage (for example, exchanging an ARM for a fixed rate), refinancing costs may prove to be a smart move. When a current interest rate is market price or lower, avoiding the costs of refinancing may be best and considering a second mortgage loan may be a better idea.
Lenders can offer no-cost and low-cost fixed rate second mortgages and home equity lines of credit. A lender may pay for the title and escrow on a second mortgage loan and waive an appraisal fee if the combined loan to value (CLTV) is within certain limits. There may be a trade-off between loan costs and the interest rates. If the loan is a short term deal, go with lower costs. For loans around for 15 years, add the numbers to determine if the monthly savings with a lower rate is worth the higher upfront fees.
The choice can be between an equity line of credit or a fixed rate home equity loan. Home equity lines of credit (HELOCs) are revolving accounts, sort of like a credit card works. There can be a draw on what is needed and reuse it again which offers some flexibility. HELOCs carry variable interest rates based on the prime rate, and they feature interest-only payments the first ten years and then become fully amortized over the next twenty years. To stay competitive with lower interest rate second mortgages, or home equity loans, lenders may allow borrowers to fix the rate on all or a portion of their home equity line balance.
Fixed rate second mortgages loans are usually amortized over thirty years, but in the last 15 years, keeping the payment lower and stable, but leaving the borrower with a balloon payment due at the end. When long term interest rates are lower than short term rates, fixed rate second mortgages carry lower rates than HELOCs. Neither loan usually comes with a pre-payment penalty, but lenders will often charge an early closure fee if second mortgage products are paid off within three years.
Second mortgage loans are offered at a higher rate than first mortgage products, their flexibility and reduced cost to the homeowner are usually attractive for getting home equity cash. Second mortgage qualifications are basically the same as a first mortgage. Lenders will take a home mortgage application and verify credit before approving your loan. Rates and terms vary, consider checking with several lenders, using online sources can be faster and easier.
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